Amazon.com Inc (AMZN) saw its stock price surge on Thursday, fueled by positive consumer spending data. Retail sales climbed 1% in July, exceeding economist expectations of a 0.3% rise. Year-over-year, retail sales also saw a healthy increase of 2.7%, a significant improvement from the revised 2% growth in June. This positive news was further reinforced by a decline in jobless claims to their lowest level in five weeks, easing concerns about a weakening labor market.
However, while the positive retail sales data provided a welcome boost, the news comes on the heels of Amazon’s mixed second-quarter earnings report. The e-commerce giant missed the consensus target for net sales and issued soft guidance for the current quarter, projecting net sales between $154 billion and $158.5 billion. This fell short of the previous consensus of $158.24 billion.
The positive retail sales data may not be enough to overcome the broader economic challenges facing Amazon. Earlier this year, inflation contributed to rising household debt, creating a complex landscape for investors.
For those seeking to capitalize on Amazon’s stock performance, Direxion offers two exchange-traded funds (ETFs) focused exclusively on AMZN:
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Direxion Daily AMZN Bull 2X Shares (AMZU):
This leveraged fund aims to double the daily return of AMZN, providing a potential opportunity for bullish investors.*
Direxion Daily AMZN Bear 1X Shares (AMZD):
This inverse fund offers the inverse daily return of AMZN stock, catering to investors with a bearish outlook.It’s important to note that both AMZU and AMZD are designed for short-term trading and are not suitable for long-term investment due to the daily compounding effect, which can lead to value erosion over time.
Following Amazon’s Q2 earnings, AMZU experienced a decline. However, the positive retail sales report led to a significant jump, pushing the ETF above its 20-day exponential moving average. Bullish investors are now aiming for the 200-day moving average, while the next major point of interest is the $32 line, which has acted as support throughout the year.
Conversely, the bearish AMZD has struggled since Amazon’s Q2 earnings disclosure. However, the recent retail sales data provided a glimmer of hope for bearish investors. The inverse fund slipped below both its 200-day moving average and its 20-day exponential moving average, making it crucial for bears to hold the line at the 50-day moving average. Failure to do so could trigger further downside.
The current landscape for Amazon stock is a complex one. While positive retail sales data provides a short-term boost, the broader economic challenges and Amazon’s recent earnings report present a mix of opportunities and risks for investors.
